What Makes A Trader Professional?

How many different professional traders are really out there?  If you do a google search for professional trading; you’ll get all sorts of results.

From people to strategies to everything in between.  Professional Trading has become extremely blurred and it’s time to clean this mess up.

Level 1: Professional.  The first stop on this list is the true professional.  How can you tell if the person you’re looking at is truly professional?  They must be licensed.  Whether it’s series 7, series 13, CMT, or otherwise, a true professional trader is licensed and governed by outside forces.  If they offer their name, google it and look for a license.  If they offer a company they mainly stand behind, it’s fairly easy to say they are not professionally licensed.

Pros: These are the people that handle large trading for firms.  Training from someone like this gets you true inside access.

Cons: Some of the licenses here can cost thousands into the mid $20,000 range.  They are not doing this for bragging rights, it’s the cost to handle large accounts.  A 1% fee on a billion dollar account is easily enough to cover the startup fees.

However, if you see an ex trader who used to work for a large bank suddenly decide it’s time to share that info with the world for $50 or even $1,500–you’re at the wrong place.  

This is just my personal opinion, but if a trader at that level comes down to a retail level asking a few hundred dollars for a course, I would not believe that they were ever truly at the level they claim.  You would never buy a mercedes to help someone else drive a kia.  Again, just my personal opinion, but I see this alot and I truly don’t understand why.

Level 2. Retail Professional.  Full Disclaimer: This is our Level.  

This is the level for those that taught themselves how to do it and look to teach others as well.  The main reason (at least our reason) that we are not professionally certified is we do not need outside money.  

Spending the fees to become licensed and doing nothing with it simply does not make sense.  If there ever comes a point that we look to grow beyond our capabilities and require outside capital, CTA would be our license of choice.  However, at the present time, the money is not needed, and therefore neither is the license.

Pros: They’ve learned what it’s like through experience, and through a normal sized account.  The main advantage over large accounts we have is that our stops will not disrupt the system, our exits will not take away our profits in the process; our smaller size is one of our biggest edges.  This goes for the Professional Retailer as a whole group, not just CTP.

Cons: Anybody can write a good salespage and it really comes down to gut feel with the training.  We tried 3 different courses ourselves during our learning curve.  It can be extremely frustrating learning everything only to realize they are no better off than you and you must start all over.

(This is why we don’t publish our P&L or account % increases.  If we did, it would either make you think this is too easy, too hard, or be a sales trick.  All of the above are the reasons Account Returns are usually posted, but it truly does not help do anything for the end user, only sell the system.  We fell for that trick ourselves early on and as a result simply decided it will not happen on our site).

Level 3. Everyone Else.  If you aren’t a professional and you aren’t a professional retail trader, than you’re just part of the everyone else category.  I’m talking about the gurus here, not the traders and investors trying to succeed here.

These are the types that offer services that make a million dollars, 200k, 100k a year with doing nothing more than following along.

News Flash.  Insurance companies collect millions in premiums with the goal of collecting more than they pay out.  Don’t you think companies whose sole job is making more than they lose would look into these $300-$10,000 systems if all it took was a computer program?

It’s a lie.  The worst ones are those that work for the main person by entering in first and then letting the hundreds to thousands of followers, the other ones are just as bad but take less time to figure that out as no one’s winning.

Either way, stop looking at trading like a get rich quick scheme and start looking at it like a real business.

Whoever you decide to follow; make sure they match up with your style, your goals, and will work with you to help you get there.

There are lots of incredible trainers and traders out there.  CTP of course, but there really are others.  Some do it for the money, some do it for boredom, and others do it for company.  It really is a lonely career if you don’t do something about it.

Just make sure before you invest any of your money into any form of education; you understand who they are.  

 

The 5 Mental Phrases You MUST say every day to succeed in trading.

Have you ever seen a salesman just before they give a big pitch?  The bad ones look nervous, sweaty, out of place.  The great ones look confident, excited, prepared.  Sometimes you might even catch them looking in a mirror almost muttering to themselves.  Yet when the day is done; the sale is theirs.

How is this?

Mindset.  Having the skills to do the job with the confidence to do it well.  This is an incredible combination, and that muttering you sometimes see is really them telling themselves their own phrases to succeed. 

While anyone can learn how to trade; not everyone will succeed.  The setup may be the same, the temporary loss may be the same.  Yet one trader may look at the loss and jump, while the other sticks to their plan and wins.  If you gave the same winning tip to 5 traders you’d have 5 separate outcomes because they would get in their own way.

How do you solve this problem?  Like any other problem; Mindset.  Things will go wrong, but the traders with the best mindset will outlast any other trader over a long enough horizon.  Even if the weak minded trader has a better plan, more capital, and more time, the trader with a stronger mindset will come out on top 100% of the time over a long enough timeline.

Why?  Because with the right mindset; everything else catches up.  With the wrong mindset; everything else get’s passed.  

Here are 5 phrases you must start saying to yourself every single day if you want to become a professional trader.  Say them when you have trades on, say them when you have nothing on, say them when you are backtesting, say them before you go to sleep.  Develop a strong mindset, and everything else will be easier to come by.

#1.  Don’t Waste a Day.  

Success in trading takes time.  Everyone gets so jacked up and ready to knock it out after a long webinar weekend and after a few set backs they’re ready to throw in the towel by thursday.  Stop focusing on beating this game in a week.  Focus on accomplishing something every single day that gets you closer to your goals.  Some days may have significant progress; some days may be baby steps.  As long as you live by this mantra 7 days a week, you will get there.  

No access to a monitor?  Read.  No access to a book?  Think about a winning setup you recently saw and how to build off that.  No time to think that out?  Say your 5 phrases and build up your mindset.  

Do something Everyday.  No Exceptions.

#2. Would the trader I want to be in a year do what I’m about to do today?

Building on #1, this takes it to a whole other level.  You can get too exact with this and stop doing everything but trading, however, that’s not advised.

What is advised is focusing on what you really want.  Are you studying to be an equity swing trader?  Then focus on that.  Stop considering day trading strategies because that’s not who you want to be in a year.  Are you wanting to have a $10,000 account to trade with in a year?  Then stop eating out 4x a week and start saving it.  This phrase can be taken as literal or as little as you want it.  Under no circumstances should you sacrifice family time or family expenses here, that is not the goal.  Simply make sure you’re not putting yourself ahead of your year away self very often through this.

#3.  Hard Work Beats Talent when Talent Doesn’t Work Hard.

Ever seen a winning team coast by because they think they got it made, only to get passed over near the end of the game?  There’s a reason most teams don’t stay champions year after year.  Most success results in mediocrity; you’ve got to keep at it.  There’s always someone hungrier than you, and if you coast, they’ll pass you by.

#4.  Reward Effort More than Results.

Stop looking at your bottom line first.  You can take an awful trade and make money and a great trade and lose money.  The key is looking at your tracked trades and seeing how many trades were part of your plan. 

If you follow the CTP way you won’t go live until you prove your plan out.  If you are live with a proven plan and all 20/20 trades for the month were part of the plan then reward yourself at the end of the month whether you won or lost.  The plan has proven itself out over the long haul.  A bad month should only be a bad month if your efforts were bad, not your end P&L.  That will handle itself over the long haul.

#5.  Can’t Stop.  Won’t Stop.

There will be days when you want to give up.  Days where your plan fails 100% of the time.  Days where you just can’t see yourself doing this for another week let alone another year or longer.  

When this happens, remember why you started here in the first place.  Remember what got you to this point.  Once you remember that, just tell yourself “Can’t Stop.  Won’t Stop.”  Say it over and over and over again until you believe you will not stop until you succeed.  Then do something about it.

Analyze what went wrong, track your data, look at old data to compare, go get some exercise and clear your mind, get yourself back in it.

Once you’re back; say these 5 things again.  You’ll start to see things differently.  Start to believe you really cannot stop until you succeed.  Because you’re starting to have a mindset of a winning trader.

 

$10 A Backtest

No one likes to backtest.  No one likes to forward test.  Everybody just wants to trade live.  

Yet the low barrier for entry, lack of rules from outside sources, and lack of quality system team up to destroy most traders within 12 months or less.  

Ever stop to wonder why?

Nobody wants to put in the work.  

Let’s look at this a little differently.  

The average salary in America is close to $50,000 for a 4 year degree.  This may be slightly off but the math is simple so I’m going with it.  

Most traders that get on YouTube are looking to supplement or replace their income.  Let’s just assume you’re looking to make $10,000 a year on the side as a starting goal.

You found a weekend seminar that for $2,000 will teach you how to trade and make $10,000 a year.  You pay the fee and learn a ton of information and systems and strategies and you are good to go.  

You fund another $1,000 into a trading account and promptly lose it all in 3 weeks. 

Looking to make $10,000 on the side you are $3,000 worse for the wear.  Why is this?

Because you spent 4 years to make $50,000 salary and thought you could make 20% of that after a long weekend and a few all nighters.

Reality Check.  Treat this like a job.  Trading should not be any different education wise than everything else.  The goals can be different, but the timeline should at least be realized here.

New Plan.  Every Back Test or Forward Test (DEMO) trade you do, consider it a $10 deposit into your trading account.  Your account starts at zero, when it reaches $5,000, you’ve put in the time and work to unlock that money and go live if the system has been proven out.

Most traders can easily do 5 backtests a day whether its early morning or late nights.  On the weekends you can take it off or push for as many as you can handle.

If you can do 5 backtests a day, 5 days a week, that’s 25 backtests a week.

25×20=500.  

20 Weeks is the minimum time you should expect to building your plan and proving it out before going live.  

This is not a requirement, just my humble opinion.  You just have to realize that professional traders treat this like a business, and you showing up to compete with them after a weekend seminar is not going to end well for you.

You need experience and confidence to succeed here.  You can build that up over 20 weeks or longer, you cannot over a weekend study session.

 

The truth about break even trading

Talk is Cheap.  It’s easy to say I had a break even day and no one seems to know the wiser.  The reality is trading is a negative sum game.  1+1 does not equal 2, it equals 1.8.  This is because every trade has added costs of doing business, things like commissions, slippage, plan breaking, etc.  These little hits can add up to some serious pain if you let it.

Or you can plan for them, build them into your trading business and accept them from the start.  The difference is calling a break even day what it really is, a slight losing day and being completely OK with that.

Hope you like this video.  Feel free to subscribe to our YouTube channel to get tuned in to a lot more videos coming your way!

How to get out of a Trading Slump.

Trading Slumps are one of the worst parts about this job.  In my old life I installed HVAC equipment, furnaces, air conditioners, ductwork and the rest. 

A bad day meant I got hurt, was too slow, or made a mistake I had to fix the next day.  A good day meant just the opposite and maybe more.

If I put in a furnace on monday, even if something changed and I had to move it, the furnace stayed put.  In trading, a good day on monday can be replaced by a bad day on tuesday.  However, unlike my HVAC career, in trading, the money (furnace) can go and literally disappear.  This makes the slumps in this profession vs others so much harder to cope with.  

Unlike most careers where mistakes can be easily corrected or replaced, mistakes here can compound quickly and painfully, taking away days and even weeks of progress in mere hours.  Unlike most careers where something is left behind to at least speed up the repairs, trading gains can be completely wiped out and a trader can truly be left with less than they started with.

It is for this reason that a trading slump is so hard to handle in trading.  At this point in a trader’s career, there are some serious and tough choices to be made.

The trader that has established their plan, with the right backtesting and parameters set up before going live, can handle this slump with ease.  This is what we talk about day in and day out.

The trader that has not established a plan, that had quick success and decided they were smarter than the rest, until they realized they weren’t.  Those traders are the ones who are googling MACD right now, looking for that one missing piece that makes the plan fool proof.  

That one missing piece that keeps them going until the next failure that the magic indicator can’t fix.  

That sends them on a path of system jumping, guru following, slump sliding that never ends until they realize THEY have to change or they run out of money to try.

The key to getting out of a slump; is planning for the slump.  If you know a slump should come in the range of 5% of your account, than you should not be worried until you reach 5% and then look to your parameters for when it’s time to re-adjust vs ride on.

The key to staying in a slump, is thinking you can out maneuver it.  Every system has a weak point, when breakouts are strong, reversions are hammered.  When pullback are strong, breakouts are broken.  Every system takes the hits, but every system pays the bills when done properly.

The key is not jumping from breakouts to pullbacks just as the breakouts finished their slump and you didn’t know it.  

If you’re in the slump, and you don’t know what to do, get to cash.  Stop live trading and reassess.  The market will always be there.  Longevity is more important than the next trade.  We are here to help if you choose, but trading through a slump without a plan in place is closer to gambling than professional trading.

If you’re in the slump and you’re plan says you have another 4% drawdown before you should do anything, stick to the plan.  

When you plan for the slumps, you can get through the slumps.